New streetcar numbers don't sway incoming council, mayor

Nov. 22, 2013

Mayor-elect John Cranley talks about the costs of canceling the streetcar. / The Enquirer/Ally Marotti

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Canceling the streetcar won’t cost much less than finishing it, city officials said Thursday in a last-ditch effort to save the project – an effort that didn’t appear to sway the incoming mayor or council members.

The city will have tallied $32.8 million worth of work by month’s end, streetcar executive John Deatrick said in a council committee special meeting – well above previous estimates of about $26 million. Finishing the 3.6-mile route will require $71 million more in city money plus federal money, he said.

Shutting it down, on the other hand, would take more than a year and cost between $30.6 million and $47.6 million, Deatrick said. Canceling mid-construction has many complications, he said, such as finding a stopping point on new water lines being laid and deciding how to rebuild torn-up sidewalks and streets. Recouping money by selling the cars to another project would require first spending more city money to finish building them.

Deatrick oversaw the public portion of the successful Banks riverfront development before the city hired him to right the streetcar project in April. Since then, he said Thursday, it has been on time and on budget.

Bottom line: It would cost $7.5 million to $24.5 million more to finish the $133 million project than cancel it, depending on final “closeout” costs, according to the administration.

“For an $8 million difference, you get a project – you get a streetcar,” Budget Director Lea Eriksen said.

The estimated closeout costs don’t include potential litigation from property owners and contractors. Deatrick also noted that canceling the streetcar might increase the likelihood that the courts force the city to pick up Duke Energy’s estimated $15 million cost to move gas and electric lines.

Streetcar supporters on council pronounced the decision a no-brainer, but Mayor-elect John Cranley and the three incoming council members were largely unimpressed. Kevin Flynn, David Mann and Amy Murray, all streetcar opponents who attended the special budget committee meeting, questioned the numbers and again called for a temporary halt to construction.

“We have to scrutinize these numbers,” Flynn said. “There was a lot said – and a lot that wasn’t accurate.”

Deatrick announced midway through the presentation that some slides had incorrect numbers and changed them by several million dollars. Even with the change, the administration’s math was unclear and it was uncertain how they got the final figures.

Flynn and Murray also said operating costs were largely unaddressed Thursday. They are expected to run $3.4 million to $4.5 million a year, Eriksen said, with about 20 percent covered by fares. The rest is slated to come from casino proceeds.

Cranley, who didn’t attend the presentation, ridiculed the idea that it would take a year or more to shut down the streetcar.

“Of course the people who have incompetently run this project would be incompetent at shutting it down,” he said. “That’s why we’re going to have new leadership.

“It does not cost $40 million to say ‘stop’,” Cranley said.

He expressed confidence that contractors Messer Construction and Prus Construction – both local companies – would cooperate in ending the streetcar project: “I believe they will be great partners to unwind this mess.”

Cranley and all three incoming council members repeated their calls for the current council to stop construction until they’re seated Dec. 1.

Mann noted that the city seems to have actually increased the pace of streetcar spending: “So much has been done in the past few months to dig as deep a hole as possible for the new council.”

A majority of the current council supports the streetcar, but opponents Christopher Smitherman, Charlie Winburn and P.G. Sittenfeld were all re-elected, so the three newcomers’ “no” votes should be enough to stop it. Sittenfeld has asked questions about the numbers in recent days but was out of town Thursday and couldn’t be reached. Smitherman also didn’t attend the meeting.

Current members who support the streetcar pointed to Deatrick’s presentation as further evidence that it would be wasteful to stop now.

Young compared the streetcar project with Cincinnati’s unfinished subway: “We should be able to learn from our past and not repeat it.”

Vice Mayor Roxanne Qualls, who lost to Cranley in her bid for mayor, asked the new council to really look at the numbers and ask questions before making a final decision.

“If what has been presented today stands up to scrutiny, it makes no sense to cancel this project,” she said.

Streetcar math

The city administration outlined costs to date and estimated cancellation expenses at a special meeting of council’s budget and finance committee Thursday afternoon.